ROVD Engineering has halted all expansion plans and warned that significant job losses are on the horizon after the imposition of a 30% tariff by the US on SA goods.
The 61-year-old Eastern Cape firm specialises in industrial automation systems, which are designed, manufactured and exported from its Gqeberha facility to support production lines at global automotive manufacturers.
However, it has lost hundreds of millions of rand in confirmed and near-finalised export contracts, with major US clients withdrawing due to sudden cost escalations and trade uncertainty.
ROVD chief executive Garth de Villiers said the firm was about to double its workforce, launch new facilities and inject energy into the city’s economy.
“Now that entire future has been pulled out from under us.”
At full operational capacity, ROVD directly employs more than 150 people across its design, fabrication, assembly and installation operations.
However, the company’s true economic impact goes far beyond its gates.
ROVD people and culture manager Athi Lupondwana said that when fully loaded, the overflow work was passed to a wide network of local subcontractors and sub-suppliers.
“[They] rely on our workflow to keep their teams employed,” Lupondwana said.
“This ripple effect sustains hundreds more jobs in our community, from fabrication and machining to logistics and painting.
“If our order book dries up, their work dries up. The consequences are exponential,” Lupondwana said.
“If we lose industrial jobs here, we lose the support ecosystems around them. It’s not just factories, it’s families and entire communities.”
Before the tariff announcement, ROVD had secured land to build new premises and started architectural work to triple its production capacity.
The project would have created dozens of new skilled positions, apprenticeships and local procurement opportunities across the Eastern Cape.
That investment is now suspended indefinitely.
“This was not a conceptual project. We were building our future home. Now, it’s just silence,” De Villiers said.
In 2024, ROVD shipped 120 containers to the US, spending R28m on logistics.
With the new tariff, each container now attracts an additional R280,000, resulting in more than R33m added.
Despite announcements of relief and assistance for affected businesses by the government, ROVD said it had received no direct contact, clarity or support.
“The support mechanisms might exist in theory, but in practice, we’ve received nothing. No calls. No clarity. No help,” Lupondwana said.
ROVD is now considering offshore manufacturing to remain globally competitive, a move that would end 61 years of operations in Gqeberha.
“After 61 years in Gqeberha, this is not a decision we ever thought we’d have to consider.
“But right now, we are being penalised for trying to compete,” De Villiers said.
“We don’t need blanket statements. We need decisions, diplomacy and decisive action.
“Otherwise, the Eastern Cape will quietly collapse and no-one will have stopped to notice.”
Nelson Mandela Bay Business Chamber chief executive Denise van Huyssteen said the tariffs were a big blow for businesses, especially in the automotive and agricultural sectors.
“The Eastern Cape economy, including Nelson Mandela Bay, is likely to be the most adversely affected in the country by these developments.
“We are starting to see the immediate impact of this on local companies that trade directly with the US, such as ROVD.
“This is a very concerning situation which makes their export contracts unsustainable, in turn affecting future growth plans, as well as the ongoing viability of their operations and ability to continue to employ people,” she said.
“This has the added knock-on impact on other businesses which provide services to them, and also further weakens the ecosystem around our local manufacturing industry.
“It is estimated that each job in manufacturing creates another five jobs through the supply chain, with substantial socioeconomic impact as each employed breadwinner supports about 10 people in extended families and communities, as well as spending their income in local businesses.”
Van Huyssteen said it was critical that the government moved with speed to take action to protect local manufacturing and put it on a much more level playing field with global competitors.
“Negotiations need to continue with the US in an attempt to reach more favourable trade conditions between the two countries,” she said.
“Export markets cannot simply be switched overnight. We need to strengthen existing trade relations with key markets in Europe and Southeast Asia.
“Moreover, we now do not have specified free trade agreements in place with Brics markets and our trade with these countries tends to be oriented around SA providing unbeneficiated raw materials and these countries in turn providing us with finished manufactured products.
“There needs to be an urgent and concerted focus to change this equation, so that it becomes more balanced, to enable SA to also provide manufactured goods, thus enabling the retention and creation of meaningful local jobs.”
The Herald
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